Innate immune responses and inflammation are regulated in part by neural mechanisms. In the present paper, we summarize experimental evidence that reveals that innate immunity and inflammation are controlled by the vagus nerve, previously known as a regulator of other vital physiological functions. Activation of vagus nerve cholinergic signalling inhibits TNF (tumour necrosis factor) and other pro-inflammatory cytokine overproduction through ‘immune’ α7 nicotinic receptor-mediated mechanisms. This efferent vagus nerve-based ‘cholinergic anti-inflammatory pathway’ has been elucidated as a critical regulator of inflammation in several experimental models of diseases. Our recent observations have shown that activation of central (brain) cholinergic transmission by selective muscarinic receptor ligands results in lower systemic TNF levels in rodents and indicate that the efferent vagus nerve may provide a functional brain-to-immune connection. Thus central cholinergic signalling is implicated in the activation of the cholinergic anti-inflammatory pathway. Electrical vagus nerve stimulation is clinically approved for the treatment of epilepsy and depression and current knowledge suggests that it could be utilized to control inflammation. Advances in understanding the receptor and molecular mechanisms of cholinergic anti-inflammatory signalling indicate that selective α7 nicotinic receptor agonists and centrally acting cholinergic enhancers can be used in the treatment of pathological conditions characterized by cytokine overproduction.